This description relates to markdown management.
A merchandiser who is planning to sell an item of fashion merchandise that has a short-life-cycle (for example, a style of ladies' dress shoes) typically orders an initial inventory of the item at the beginning of a season, sets an initial retail price, and offers the item to customers. Because a fashion item will have little value after the season in which it is offered, the merchandiser watches the inventory level carefully. If the merchandiser believes that sales are not brisk enough to assure that the full inventory will be sold by the end of the season at the initial full price, he will reduce the price one or more times during the season with the goal of increasing the demand in order to clear out the inventory. Decisions about such markdown prices (called markdown management) directly affect the retailer's profit.
The success of markdown management is sometimes measured by the direction and degree of change of sales and gross profit dollars from one year to the next. This approach conflates many factors into one measurement, including buyer decisions, inventory allocation, promotional campaigns, sales force performance, clearance pricing decisions, macroeconomic factors, and the weather.